Unilever serves up 7% higher profits

Feb 8 2008 by Alex Turner, Liverpool Daily Post

UNILEVER announced a 7% increase in annual pre-tax profits to £3.87bn yesterday thanks largely to a rise in the prices of their goods.

The company, which owns household brands including Flora, Wall’s, Hellmann’s and Vaseline, enjoyed a 6.1% rise in sales for the final three months of the year, with almost half of the increase resulting from higher prices.

Unilever said the price hikes were the result of “sharply higher” commodity costs, which it also offset through cost savings.

Last November the consumer products giant, which was founded in Port Sunlight, announced 200 jobs were to go at its detergent plants in Wirral and Warrington as part of a nationwide programme.

At the same time they announced £15m investment in technology at their North West sites.

Chief executive Patrick Cescau said the cost cutting was paying off as the group had now delivered its third successive year of accelerating sales growth, alongside an improvement in margins.

He said: “This is clear evidence that our strategy of focusing resources on faster growing and profitable segments is succeeding.

“The re-shaping of the business and the acceleration of our change programme are bringing real benefits. They make Unilever a more flexible and resilient company, better placed to meet the challenges of operating in a tougher economic and cost environment.

“We therefore remain confident of achieving our 2010 goals – for an operating margin in excess of 15% while delivering consistent, competitive growth along the way.”

Unilever described consumer demand in the region as steady, with growth at 2.8% throughout 2007, and said it boosted performance through product innovation and improved quality.

Mr Cescau said the company expected sales growth to be towards the upper end of its 3% to 5% target range in 2008.

alex.turner